(3) It encourages thrift. (4) It furthers the educa tion of the coöperatives. wards his working-class fellows. The first members of a store are generally seriously-minded men who recognize the risk of indebtedness. They know their members in a way that the ordinary shopkeeper cannot know his changing circle of customers. Since all members must hold at least one share, the store has a powerful lever for compelling obedience to its rules. As soon as the working class become habituated to cash payments, they continue because they realize its advantages. [The payment of a dividend by a coöperative store encourages thrift on the part of members.] From the increased trade at the stores immediately after the payment of profits, [in the form of dividends], it is clear that many of the members depend on these profits as a means to re-clothe, re-furnish and add generally to the comfort of their homes. Thus the money saved at the stores and periodically spent gives a new fillip to trade. It is also well known that many coöperative working men depend upon the store profit to pay their rent. . . . In many [English] towns building societies grant loans to working men for the purpose of purchasing their houses. The profit from the coöperative store is frequently used to meet the instalments of the loan. Many have in this way become the proprietors of their own homes without effort. [An important social aim of coöperation is] the training of men and women to take part in industrial and social reforms and municipal life generally. The work done may perhaps be classified under three heads: (1) coöperation: instruction in its history and principles; (2) general: libraries and lectures; (3) recreation: readingrooms, concerts, recreation clubs, excursions. As I have said, the attention thus paid to social education distinguishes in particular British coöperation. Questions on the foregoing Readings 1. Define profit sharing. 2. How many establishments in the United States were applying the profit-sharing principle in 1916? 3. What proportion of these establishments were manufacturing concerns? 4. Name some of the states in which these establishments were located. 5. How did the National Industrial Conference Board test the practicability of profit sharing? 6. Give an instance of where profit sharing has resulted in increased loyalty and coöperation on the part of the employees. 7. Illustrate the way in which profit sharing may reduce the labor turnover in an industrial establishment. 8. Give an example of profit sharing being abandoned because of the opposition of the trade union. 9. Give an example in which profit sharing has promoted thrift. 10. Give an example in which profit sharing has been abandoned because of its failure to eliminate labor troubles. II. What was the experience of Welshans and McEwans of Omaha, Neb., with profit sharing? 12. What opinion was expressed by the Watertown (N. Y.) Steam Engine Company with regard to profit sharing? 13. Has coöperation developed more or less slowly in the United States than in Great Britain and on the continent of Europe? 14. What is the nature of the Tri-State Co-operative Society? 15. Give an example of successful coöperation in Illinois. 16. What can be said as to coöperation in the Puget Sound section? 17. Trace, briefly, the development of coöperation in California. 18. What are the two types of producers' coöperation? 19. Which, according to the Co-operative League of America, has proved successful? Which has proved an almost universal failure? 20. Give some examples of unsuccessful producers' coöperation in the United States. 21. Name two economic benefits of the successful coöperative store. 22. Explain how the coöperative store teaches self-government. 23. To what extent does the coöperative store teach thrift? 24. What part may coöperation play in social education? In what country does coöperation lay particular stress upon this type of education? Nature of or labor theory of value. In spite of the enormous amount of time and energy spent in disthe socialist cussing socialism, astonishingly little attention has been paid to the socialist theory of value. And yet this theory of value is the basis and foundation of all socialist doctrine. This was recognized by Karl Marx, the "father" of modern socialism, and he accordingly began his great work Capital with a development of what has become generally known as the socialist or labor theory of value. Marx points out that all commodities have size, weight, color and other physical properties, but that these properties have no direct relation to the exchange value of commodities. He then declares that one property is characteristic of all commodities, i.e. they are produced by human labor. His reasoning soon becomes both complex and contradictory, but in essence it amounts to this: commodities tend to have exchange value in proportion as socially necessary labor has been expended upon them. In the following extract from his celebrated book Capital, Marx explains what he means by this statement: Labor a measure of value, A. . . useful article, therefore, has value only because human labor in the abstract has been embodied or materialized in it. How, then, is the magnitude of this value to be measured? Plainly, by the quantity of the value-creating substance, the labor, contained in the article. The quantity of labor, however, is measured by its duration, and labor-time in its turn finds its standard in weeks, days, and hours. Some people might think that if the value of a commodity is determined by the quantity of labor spent on it, the more idle and un 1 From Karl Marx, Capital. Swan, Sonnenschein, Lowrey and Co., London, 1887. Vol. 1, Part 1, Chapter 1, Section 1. only by the amount of labor which is socially necessary to commodity skilful the laborer, the more valuable would his commodity be, because but value is measured more time would be required in its production. The labor, however, that forms the substance of value, is homogeneous human labor, expenditure of one uniform labor power. The total labor-power of society, which is embodied in the sum total of the values of all commodities produced by that society, counts here as one homogeneous produce the mass of human labor-power, composed though it be of innumerable in question. individual units. Each of these units is the same as any other, so far as it has the character of the average labor-power of society, and takes effect as such; that is, so far as it requires for producing a commodity no more time than is needed on an average, no more than is socially necessary. The labor-time socially necessary is that required to produce an An example. article under the normal conditions of production, and with the average degree of skill and intensity prevalent at the time. The introduction of power looms into England probably reduced by onehalf the labor required to weave a given quantity of yarn into cloth. The hand-loom weavers, as a matter of fact, continued to require the same time as before; but for all that, the product of one hour of their labor represented after the change only half an hour's social labor, and consequently fell to one-half its former value. We see then that that which determines the magnitude of the Conclusion. value of any article is the amount of labor socially necessary, or the labor-time socially necessary, for its production. . . . Commodities, therefore, in which equal quantities of labor are embodied, or which can be produced in the same time, have the same value. . . . 74. The laborer creates all value 1 Marx built a complex system of socialist philosophy upon the principle stated in the foregoing selection. Omitting the complexities and qualifications which accompany his further statement of this principle, he believed commodities to have value in proportion as socially necessary labor has been expended upon them. This conclusion arrived at, Marx next asserted that it is the laborer, and the 1 From Karl Marx, Value, Price and Profit. Chas. H. Kerr and Co., Chicago, 1908. Chapter VIII. Significance ciple stated above. of the prin Suppose a laborer needs three shillings to support himself for a single day, and that he can He sells his But the latter makes the laborer work more than three shillings' worth, i.e. more than six hours. laborer alone, who is responsible for the value of commodities. This second point he developed in the following language: Now suppose that the average amount of the daily necessaries of a laboring man require six hours of average labor for their production. Suppose, moreover, six hours of average labor to be also realized in a quantity of gold equal to three shillings. Then three shillings would be the price, or the monetary expression of the daily value of that man's laboring power. If he worked daily six hours he would daily produce a value sufficient to buy the average amount of his daily necessaries, or to maintain himself as a laboring man. But our man is a wages laborer. He must, therefore, sell his laboring power to a capitalist. If he sells it at three shillings daily, or eighteen shillings weekly, he sells it at its value. Suppose him to be a spinner. If he works six hours daily he will add to the cotton a value of three shillings daily. This value, daily added by him, would be an exact equivalent for the wages, or the price of his laboring power, received daily. But in that case no surplus value or surplus produce whatever would go to the capitalist. Here, then, we come to the rub. In buying the laboring power of the workmen, and paying its value, the capitalist, like every other purchaser, has acquired the right to consume or use the commodity bought. You consume or use the laboring power of a man by making him work, as you consume or use a machine by making it run. By buying the daily or weekly value of the laboring power of the workman, the capitalist has, therefore, acquired the right to use or make that laboring power work during the whole day or week. . . [Now] the value of the laboring power is determined by the quantity of labor necessary to maintain or reproduce it, but the use of that laboring power is only limited by the active energies and physical strength of the laborer. The daily or weekly value of the laboring power is quite distinct from the daily or weekly exercise of that power, the same as the food a horse wants and the time it can carry the horseman are quite distinct. The quantity of labor by which the value of the workman's laboring power is limited forms by no means a limit to the quantity of labor which his laboring power is apt to perform. Take the example of our spinner. We have seen that, to repro |